ACTU SUBMISSION Review of skilled migration and 400 series visa … · Review of skilled migration...

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ACTU SUBMISSION

Review of skilled migration

and 400 series visa programs

17 October 2014

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Table of Contents

INTRODUCTION .............................................................................................................. 3

OVERVIEW OF OUR POSITION ON SKILLED MIGRATION ............................................... 3

OBJECTIVES AND PRINCIPLES UNDERPINNING THE REVIEW ...................................... 4

KEY THRESHOLD ISSUES .............................................................................................. 5

The shift towards employer-sponsored migration ....................................................... 6

The temporary visa workforce in Australia ................................................................... 8

The push to expand the skilled migration program into lower-skilled occupations 12

Pathways to permanent residency.............................................................................. 13

The importance of labour market testing and strong regulation for community

acceptance of the skilled migration program ............................................................ 14

COMMENT ON ASPECTS OF THE DISCUSSION PAPER ................................................ 15

Points Test .................................................................................................................... 15

English language proficiency ....................................................................................... 16

Streamlining visa categories ....................................................................................... 16

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INTRODUCTION

The ACTU welcomes the opportunity to make a preliminary submission to the review of skilled

migration and 400 series visa programs.

The ACTU is the peak body for Australian unions, made up of 46 affiliated unions. We

represent almost 2 million working Australians and their families.

In this submission we provide an overview of our position on skilled migration and some of

the key principles and considerations that should underpin this review. We then identify

some of the major threshold issues the review should address and provide comment on

some specific matters raised in the discussion paper.

This review has been billed by the Department as the biggest review in 25-30 years and one

which will result in a far-reaching transformation of the skilled migration program.

A review of such ambition must be prepared to conduct a ‘root and branch’ assessment of

the key features of the skilled program. As part of this review, it is imperative that current

policy settings are subject to critical questioning and debate.

This includes debate over key matters such as the size and largely uncapped nature of the

current temporary visa holder workforce in Australia, and the ongoing and increasing shift

towards employer-sponsored migration, away from permanent, independent migration.

We understand that this is the first stage of what is intended to be a major review and we

look forward to participating as the process continues.

OVERVIEW OF OUR POSITION ON SKILLED MIGRATION

The ACTU and our affiliated unions are longstanding supporters of a strong, diverse and non-

discriminatory immigration program.

Immigration is an integral part of the Australian story. Migrants have made and continue to

make an invaluable contribution to Australia’s social, cultural and economic life. Unions are

particularly proud of the fact that thousands of our members across the country are migrants

or come from migrant backgrounds, and indeed union officials too have similarly diverse

backgrounds.

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Unions recognise that skilled migration will continue to be a part of the response to our

future national skill needs. Our clear preference is that this occurs primarily through

permanent migration where workers enter Australia independently, with a greater stake in

Australia’s long-term future and without the ‘bonded labour’ type problems that can emerge

with temporary, employer-sponsored migration.

We recognise that there may be a role for some level of employer-sponsored and temporary

migration to meet critical skill needs. However, there needs to be a proper, rigorous process

for managing this and ensuring there are genuine skill shortages and Australian workers are

not missing out on jobs and training opportunities.

The skilled migration program should not be a substitute for properly investing in and training

the Australian workforce. Instead, it should be viewed as supplementary to national skills

policy and the supply of skilled workers delivered through domestic education and training

and by increasing the labour force participation of those who continue to be under-

represented in the workforce.

The first priority must always be to maximise jobs and training opportunities for Australians –

that is, citizens and permanent residents of Australia, regardless of their background and

country of origin – and ensure they have the first opportunity to access Australian jobs.

OBJECTIVES AND PRINCIPLES UNDERPINNING THE REVIEW

It is vital that a review of this scope is underpinned by clear and consistent policy principles.

We note that the discussion paper has made some attempt to do this by identifying six

principles that will guide the review and a further four terms of reference. Elements of those

principles that we strongly support include the importance of maintaining integrity in the

program, supporting and complementing the Australian labour market, and ensuring the

primacy of Australian workers.

The problem is that the review principles and terms of reference are heavily, and

unnecessarily, influenced by this Government’s deregulatory agenda, which it seeks to apply

across all areas of government policy regardless of the circumstances, and its pre-

occupation with reducing what it considers to be ‘red tape’ and imposts on business. The

same pre-occupation with deregulation was apparent in the terms of reference for the recent

review of the temporary 457 visa program.

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No real consideration is given in the discussion paper to the conflict between the various

principles and terms of reference and how this conflict should be managed and the

principles prioritised. As we submitted to the 457 visa review panel, the integrity of the

program should be paramount. Considerations of how to deregulate the program and vague

notions of ‘red tape reduction’ are, at best, a second order issue. In most cases, it is simply

not appropriate that ‘deregulation’ even be a relevant consideration.

The context is important in this regard. For example, it may be reasonable to focus on

reducing ‘red tape’ and simplifying visa products when looking at how to best facilitate the

movement of overseas players, officials and spectators coming to Australia and New Zealand

for the upcoming Cricket World Cup.

However, when looking at the many visa types with work rights attached to them, the clear

priority should be the integrity of the program, and protecting employment opportunities for

Australian workers and promoting the wellbeing of all workers. The ongoing cases of visa

fraud that have been reported recently under both the permanent and temporary migration

streams further illustrate why ‘deregulation’ is not an appropriate policy principle to underpin

the review.

KEY THRESHOLD ISSUES

In our submission, a review of this sort provides an important opportunity to consider

properly some key threshold issues concerning the future direction of the skilled migration

program.

These include the increasing trend towards employer-sponsored, rather than independent

migration; the growing size and nature of the temporary visa workforce in Australia, and the

continuing push to open up more pathways for lower-skilled migration. These are major,

interrelated shifts in how the skilled migration program has traditionally operated, and there

needs to be far more discussion and debate of these issues than that provided in the review

discussion paper. This is a debate the Government needs to have not only with interested

stakeholders in this review, but with the broader community.

These issues are discussed further below.

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The shift towards employer-sponsored migration

Independent, permanent migration has very much been the basis for the success story of

immigration in Australia over a number of decades. However, as the discussion paper notes,

in more recent years the focus has shifted markedly, with ‘demand-driven’ employer-

sponsored migration increasingly holding sway under successive governments of both

persuasions. The bulk of Australia’s migrant workforce now comes from employer-sponsored

and temporary migration.

In our submission, this is a trend that effectively outsources decisions about our national

migration intake to employers and their short-term needs, over the national interest and a

long-term vision for Australia’s economy and society. The review should not just accept this

shift as some inevitable, inexorable trend that must continue. A review of this scope and

ambition should be subjecting this shift to critical questioning.

Unions continue to have concerns with a skilled migration program that relies excessively on

employer-sponsored migration. This is a concern that applies particularly to the temporary,

employer-sponsored 457 visa program, but it applies also to the permanent, employer-

sponsored programs; the Employer Nomination Scheme (ENS) and the Regional Sponsored

Migration Scheme (RSMS). This concern plays out in different ways.

At the individual level, employer-sponsored visas where workers are dependent on their

employer for their ongoing visa status increase the risk for exploitation as workers are less

prepared to speak out if they are underpaid, denied their entitlements, or otherwise treated

poorly. For example, this is one of the continuing objections that unions have to the

permanent RSMS visa because it virtually bonds the visa holder to the same employer for

two years. If the visa holder leaves the employer within 2 years, the Department can cancel

the visa. Regardless of how often the Department exercises its discretion to cancel the visa,

the fact that it has the power to do so leaves a cloud hanging over those visa holders.

The now well-worn pathway from a temporary 457 visa to a permanent employer-sponsored

visa 1 creates the same kind of problems in that temporary overseas workers with the goal of

employer-sponsored permanent residency have their future prospects tied to a single

employer. Under visa rule changes effective from 1 July 2012, 457 visa workers must stay

with their 457 sponsor for a minimum period of 2 years before becoming eligible for an

employer-sponsored permanent residency visa with that employer. Again, this makes them

much more susceptible to exploitation and far less prepared to report problems of poor

treatment in the workplace for fear of jeopardising that goal. This was a core problem

identified back during the Deegan review in 2008 and was also acknowledged in the recent

report by the 457 review panel.

1 Figures in the recent report of the 457 visa review panel show that in the 11 months to 31 May 2014, 61% of employer-nominated visas went to former 457 visa holders.

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By contrast, the discussion paper for this review appears to see employer-sponsorship only in

a positive light, citing the benefits for the visa holder of guaranteed employment and arguing

that it serves to protect the rights of employees and decreases the likelihood of exploitation.

There is no recognition of the many problems associated with employer-sponsorship and

dependence on a sponsoring employer that are played out on a regular basis. This includes a

number of recent reported cases of visa holders and visa applicants being forced to pay their

sponsors large sums of money in return for promises of future employment and sponsorship.

At a broader level, the concern referred to above is that the trend to ‘demand-driven’

employer-sponsored programs effectively outsources decisions over an ever-increasing part

of the migration intake to employers.

The risk here is that the migration program will increasingly be responding to what the

discussion paper itself describes as employers’ ‘immediate business needs’, rather than

being structured in a rational and coherent way that allows for longer-term skill needs of the

Australian workforce and economy to be addressed.

The increasing shift to a more ‘demand driven’ skilled migration program, appears to rest on

an assumption that the short term interests of employers are consistent with, and reflect, the

long term interests of the Australian economy and of the migrant workers themselves. This is

not necessarily the case. As Professor Sue Richardson has observed, “it is in the employers’

interests to have more of a given skill available at all times: they do not consider the

personal and social costs of oversupply of specific skills.2

The OECD has also emphasised the risks associated with an excessive reliance on employer

preferences:

A regulated labour migration regime would, in the first instance, need to incorporate

a means to identify labour needs which are not being met in the domestic labour

market and ensure that there are sufficient entry possibilities to satisfy those needs.

In theory, employers could be considered the group of reference for determining this,

but historically, requests by employers have not been considered a fully reliable

guide in this regard, at least not without some verification by public authorities to

ensure that the requests represent actual labour needs that cannot be filled from

domestic sources. 3

This demonstrates again the need for all forms of employer-sponsored migration to be

underpinned by rigorous labour market testing, monitored and enforced by the Department

with tripartite oversight.

2 As cited in Phil Lewis, The Labour Market, Skills Demand and Skills Formation, Occasional Paper 6/2008, Skills Australia and The

Academy of the Social Sciences in Australia, Canberra 2008, 4. 3 OECD, International Migration Outlook 2009, 134.

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The growing trend towards employer-sponsored, rather than independent, migration

represents a major shift in how the migration program has traditionally operated, and it has

occurred without any real debate. The ACTU position continues to be that the current

weighting of Australia’s skilled migration program towards employer-sponsored pathways

should be re-evaluated, with greater emphasis given to the permanent, independent stream

as the ‘mainstay’ of the skilled migration program.

Our preference for permanent over temporary migration recognises that permanent migrants

provide a more stable source of skilled workers with a greater stake in Australia’s future and

in integrating into all aspects of Australian community life. With permanent residency,

migrants have a secure visa status. This makes them less susceptible (though not immune)

to exploitation and less likely to generate negative impacts on other Australian workers in

terms of wages, employment conditions and job and training opportunities.

Our preference for independent over employer-sponsored migration recognises the risks

outlined above that are inherent in employer-sponsored visas where workers are tied to their

sponsoring employer.

The temporary visa workforce in Australia

A related issue left largely untouched in the discussion paper and in public policy debate is

the size and nature of the temporary migration program. The discussion paper even goes so

far as to indicate that consideration of the temporary working holiday visa types is outside

the scope of this review.

In our submission, a review of this scope should not be ignoring these issues. For the

reasons outlined below, an assessment of the extent and impact of the temporary visa

workforce in Australia should be one of the priority issues for this review.

As at 31 May 2014, there are currently more than 1.7 million temporary residents in

Australia, including New Zealanders. With the main exception of visitor visa holders, most of

these visa holders are able to work in Australia i.e. around 1.5 million of these visa holders

have work rights. This equates to more than 12% of the total Australian labour force of over

11.6 million.

The table below reproduced from the Panel report shows the current make up of temporary

visa holders in Australia.

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Table 1 Temporary visa holders in Australia at 31 May 2014 by visa category

Unlike the permanent migration program, there is no cap on most of these various temporary

visa types to take account of the labour market. Under current settings, the numbers can

continue increasing, even as unemployment and youth unemployment rises.

Except for the 457 visa program, there is no labour market testing or restrictions on the type

of occupations the visa holders can work in i.e. they can work in lower-skilled parts of the

labour market.

The suggestion that Australian immigration policy is based on ‘managed migration’ appears

increasingly hollow in this light. While it may be true for the permanent migration program, it

is clearly not for the temporary migration program.

The number of temporary overseas workers has been increasing for some time in a number

of visa types. For example, the number of working holiday makers currently in Australia is

159 096. This is an increase of over 50% since 2010, when there were just over 100 000.

Student visa holder numbers have increased by 33 000 or 9.2% just since September 2013.

Increasingly, workers on these other temporary visa types are seeing this as a route to a 457

visa and, ultimately, permanent residency. This is evident in the increasing trend for 457 visa

applications to originate from persons already ‘onshore’ in Australia on other visa types. Over

50 per cent of applications for 457 visas now come from people already in the country, many

already working for the employer sponsoring them.

The report of the 457 review panel found that in the 11 months to 31 May 2014, 67 per cent

of the onshore visa grants, and 34 per cent of all 457 visa grants were made to persons on

working holiday visas, student visas or temporary graduate visas. The table below

reproduced from the panel report shows the large rises over the past decade in the number

of 457 visa grants onshore to former students and working holiday makers.

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Table 2 Subclass 457 Primary visa granted by client location between 1 July 2001 and 31

May 2014 by last visa held (visa category)

Many of these 457 visa workers then go onto employer-sponsored permanent residency.

Figures in the Panel report show that in the 11 months to 31 May 2014, 61% of employer-

nominated PR visas went to former 457 visa holders, who as the table above shows often

started on other temporary visa types. In some cases, student visa holders, temporary

graduate visa holders, working holiday visa holders, and even visitor visa holders go directly

to an employer-sponsored PR visa. The table below from the Panel report shows these trends

over the past decade.

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Table 3 Migration programme outcome 2004-2005 to 2013-2014 – Employer Nominated

only by last substantive

In our submission, this review should be considering the temporary visa program, including

its growing size and uncapped nature, and provide an assessment of the impact this

additional labour supply has on wages and working conditions for Australians, particularly on

young Australians in lower-skilled parts of the labour market. Responses that should be

considered include capping visa numbers where labour market conditions require it.

In particular, we submit strongly that consideration of the working holiday visas should not be

excluded from the scope of this review. The suggestion that these visa types are excluded

because they are primarily about travel and cultural exchange fails to recognise the reality of

how these visas are utilised in practice.

Working holiday visa holders can lawfully work in Australia from the date of their arrival to the

date of their departure non-stop and full-time. The sole work restriction is that the visa holder

can only work in Australia for up to six months with each employer. This is known as visa

condition 8457. For many young people, particularly for those from recession-hit countries

with high youth unemployment, it is likely that finding work is the primary purpose of their

visit to Australia. The figures provided earlier show the extent to which working holiday visas

can lead to other visas, including permanent residency.

If there is to be a serious and holistic assessment of the skilled migration and 400 series

visa program, working holiday visas must be part of the review.

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The push to expand the skilled migration program into lower-skilled occupations

The discussion paper canvasses the option of including an expanded list of ANZSCO skill

level 4 occupations on the Consolidated Sponsored Occupation List and/or the Skilled

Occupations List.

In our submission, the review should categorically rule out this ongoing employer-driven push

to expand the skilled migration program into lower-skilled occupations. In recent years, we

have seen growing pressure from employers on this front. For example, the trucking industry

has been calling for truck drivers to be included on the CSOL. The tourism and hospitality

sector has been vocal in pushing for access to be opened to temporary overseas workers to

fill positions across a range of occupations such as waiters, baristas, beauty therapists,

housekeepers, concierges, charter and tour bus drivers, and gaming workers. Personal care

workers in the aged care industry are another example where employers are pushing the

boundaries.

The overall skilled migration program is, as the name suggests, about meeting the need to

attract migrants in skilled occupations in the trades and the professions that cannot be met

domestically. This recognises that workers employed in lower-skilled occupations are

generally able to develop these skills within a shorter period of time or through on-the-job

training, and therefore it is reasonable to expect that employers will obtain Australian

workers from the local labour market. Bringing in lower-skilled workers from overseas also

creates greater potential for exploitation by unscrupulous employers because these workers

are likely to have more limited bargaining power and often have lower English language

skills.

Unions therefore strongly oppose any proposal for the skilled migration program to provide

an open door for employers to bring in more semi-skilled or unskilled workers. For the

reasons discussed above, current occupation lists have been confined largely to skilled

occupations and access to lower-skilled workers has until now been restricted to several

discrete pathways, including labour agreements and, potentially, Enterprise Migration

Agreements in the resources sector, as well as the Pacific Island Workers Scheme. Large

numbers of student visa holders and working holiday makers can also work unrestricted in

lower-skilled occupations. As it is, unions have a number of concerns with how these existing

pathways currently operate, and do not support any further pathways for semi-skilled

opportunities being opened up.

Further opening up migration pathways for semi-skilled and unskilled workers sends all the

wrong messages to employers and the community generally and should be rejected by this

review. In this respect, we note and welcome the clear statement from the 457 visa review

panel that access to the 457 visa program should continue to be confined to skilled

occupations, and attempts by employers to open it up to lower-skilled workers were rejected.

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Pathways to permanent residency

In the sections above, we have highlighted the extent to which temporary visa holders –

whether that be 457 visa holders, working holiday visa holders, student visa holders etc. –

move through to permanent residency. The fact that a large number of temporary migrants

have this goal is perfectly understandable on their part and we recognise that achieving

permanent residency helps put these workers on a much more secure footing. However, it is

undeniable that this lure of permanent residency has played a part in many of the cases of

exploitation of temporary visa workers in Australia. As noted above, this has been a key point

made by the two major reviews of the 457 visa program in recent times; the 2008 Deegan

Report and the 2014 Azarias report.

The review should seek to tackle this issue in two ways.

First, the review should be questioning why Australia now has a skilled migration program

that relies predominantly on temporary and/or employer-sponsored migration, which is

largely uncapped. As discussed above, in our submission, the program should be

recalibrated with a stronger focus on permanent, independent migration. Robust labour

market testing is critical so that employer-sponsored migration (whether permanent or

temporary) occurs only when employers have shown they have thoroughly tested the labour

market and not been able to find a suitable Australian worker for the job. Where necessary,

caps should be placed on temporary forms of migration such as working holiday visas where

labour market conditions require it.

Second, the review should explore options for temporary workers to move towards

permanent residency that do not involve such dependence on a single sponsoring employer

and the development of a bonded labour type situation.

We note the 457 visa review panel considered this issue in its recent report to Government.

One of its recommendations was to retain the current requirement for a 457 visa holder to

work for at least two years to be able to transition to employer-sponsored residency but allow

for mobility between employers by reducing the qualifying period with the sponsoring

employer to one year. It is important that any such transition to permanent residency is

underpinned by a rigorous process of labour market testing to ensure that the labour market

conditions used to justify the granting of the original temporary visa are still valid.

The ACTU also supports the idea of giving 457 visa workers priority access to independent

permanent migration as a way to reduce the problems caused by dependence on a

sponsoring employer. The suggestion by the Panel to increase the points earned for time

worked in Australia could be one way to do that.

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Developing pathways to permanent residency that are less prone to workers being exploited

is, in our submission, far preferable to the idea that has been floated of having hard time

limits on temporary visas with no avenue at all to permanent residency. Our concern is that

this only serves to further entrench people on temporary visas as second class guest workers

bonded to their employer with no other options. However, it should be clear that while

permanent residency may be the ultimate outcome in some cases, facilitating that pathway

is not the purpose of temporary visas like 457s.

The importance of labour market testing and strong regulation for community acceptance of the skilled migration program

One of the stated principles guiding this review is that ‘integrity is essential to maintain the

continued acceptance of a skilled migration program’.

This principle recognises that ongoing community support for a strong skilled migration

program rests on confidence that certain elements of the program are not being misused to

the detriment of either Australian workers or overseas workers. The temporary 457 visa

program is a case in point.

Labour market testing is central to this. In our submission, evidence that a genuine and

rigorous system of labour market testing regime is in operation is fundamental to ensuring

ongoing community support and acceptance for continuing migration levels. This is

particularly the case during periods of relatively high unemployment. The latest ABS data

show unemployment again above 6 per cent with almost 750 000 Australians looking for

work. Youth unemployment is 13.2%.

Whether it is young people looking for the first job or older workers looking to get back into

the workforce or change careers, they deserve an assurance that they will have priority

access to local jobs before overseas workers are employed. This applies not only to the

temporary 457 visa program, but also to the permanent employer-sponsored ENS and RSMS

visas where there continues to be no requirement for labour market testing.

If governments remain intent on relying on temporary and/or employer-sponsored forms of

migration, they need to be regulated much more tightly so that only reputable employers are

using the programs and only when they can show they have thoroughly tested the local

labour market and not been able to find a suitable Australian worker for the job

The introduction of labour market testing for the 457 visa program at the end of the last

Parliament was a positive step forward in addressing these concerns. It means that

employers seeking to use 457 visa workers now for the first time have a legal obligation to

look locally first and demonstrate that a suitably qualified and experienced Australian worker

is not readily available to fill the position. This requires employers to provide evidence of their

recruitment attempts, such as job ads and participation in job and career expos, and detail

the results of such recruitment efforts.

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However, as set out in further detail in our submissions to the 457 review panel, the current

provisions for labour market testing need to be strengthened to operate more effectively.

This includes:

More rigorous evidentiary requirements for job advertising and other recruitment

efforts to ensure the intent of the legislation is achieved and Australian employment

opportunities are protected.

The Australian Government not entering into any free trade agreements that trade

away the right of the Australian Government and Australian community to require

that labour market testing occur and Australian workers are given first right to

Australian jobs.

In the interests of transparency and ongoing community confidence in the skilled

migration program, information and data on the operation of labour market testing

under the legislation should be made publically available.

COMMENT ON ASPECTS OF THE DISCUSSION PAPER

Outlined below are further comments on specific matters raised in the discussion paper.

Points Test

The ACTU has broadly supported a points-based approach for entry into the independent,

permanent migration stream. We recognise the benefits of this approach in providing

objectivity in the processing of applications, increasing transparency for applicants, and

providing government with a degree of control over the migration pathway through the

capacity to recalibrate the number of points assigned to different criteria.

The overall aim of the point test should be to ensure Australia gets the skilled migrants

required to meet our medium to long term skill needs as identified by the Skilled Occupations

List.

In constructing the points test it is important that no single factor becomes a determining

factor and creates perverse incentives and outcomes, as has been the case in the past. At

the same time, it is important that the points test is not overloaded with too many factors.

We support a strong focus on the core criteria of skills, qualifications, work experience, and

English language proficiency. This clearly puts the focus on those factors that increase the

chances of migrants moving into productive employment, and giving Australia the best

possible applicants to meet identified skill needs. These should be the primary factors

determining the success or otherwise of applications for permanent migration.

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There should be some capacity for extra points to be available based on other relevant

criteria to help separate high performing applicants on the core criteria, but these bonus

points should not be a determining factor in getting otherwise weaker applicants past the

points test benchmark.

The idea of restricting permanent migration to ANZSCO 1 occupations is not supported as it

would limit the capacity of government to use independent skilled migration to respond to

Australia’s skill needs in trade-level occupations.

English language proficiency

Unions strongly support the importance of English language skills in improving the

employment prospects and mobility of skilled migrants and in ensuring a safe and productive

workplace. English language training should continue to be a key part of government-funded

settlement services for recently arrived-migrants. We also recognise that second language

ability can improve over time with greater exposure.

Unions will continue to oppose attempts to weaken current English language standards, as

was detailed in our submissions to the 457 visa review panel and also our submission on the

new Designated Area Migration Agreements.

We note that in some skilled professions, higher English language standards set by the

relevant registration authority must be met. In the case of nursing and midwifery for example,

this requirement is an IELTS score of 7.0. There must not be any concessions on the English

language standards required for these skilled occupations.

Streamlining visa categories

The discussion paper proposes various options for streamlining the way the current visa

system is organised, such as reducing the number of visas, and grouping existing visa types

together. We note the discussion paper proposes some broad categories of visa types, based

around the length of visa, the type of activity, and whether it is permanent or temporary. Visa

requirements may then be modified depending on which category the visa falls under.

Unions are prepared to examine sensible reform options but will focus closely on what any

changes mean for the wellbeing of workers. ‘Streamlining’ that means reducing protections

and safeguards for workers will be vigorously opposed.

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ADDRESS

ACTU

365 Queen Street

Melbourne VIC 3000

PHONE

1300 486 466

WEB

actu.org.au

D No: 129/2014

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